Taxation in Interim Budget 2024
The Interim Budget 2024 presented a cautious approach to taxation, opting for continuity rather than dramatic changes on the eve of the upcoming elections. While some might yearn for bold reforms, the Finance Minister prioritized stability and relief for specific groups. Let's delve into the key takeaways for taxpayers:
No Change in Tax Slabs and Rates:
Both the Old Tax Regime and the New Tax Regime retained their existing income tax slabs and rates. This might disappoint those hoping for adjustments, but it provides stability and predictability for taxpayers.
Relief for Small Taxpayers:
A significant announcement was the withdrawal of outstanding income tax demands up to ₹25,000 for individual taxpayers and ₹50,000 for small businesses. This wipes clean the slate for many, especially those with minor historical tax liabilities.
Boost for Startups and Investments:
The government extended key tax benefits for startups and investments made by sovereign wealth or pension funds. This move aims to encourage entrepreneurial activity and attract foreign capital, potentially leading to job creation and economic growth.
Focus on Compliance and Ease of Doing Business:
The budget emphasized improving taxpayer services through initiatives like faster processing of refunds and online dispute resolution mechanisms. This signals a commitment to making tax compliance smoother for individuals and businesses.
What's Missing?
While the budget offered some relief, some key expectations remain unaddressed. No changes were announced regarding the highest tax bracket or the standard deduction under the New Tax Regime. Additionally, the much-anticipated rationalization of income tax exemptions was absent.
Looking Ahead:
The interim budget provides a temporary snapshot of the government's fiscal stance. The full budget, expected after the elections, will likely offer a more comprehensive picture of tax policy changes. Until then, taxpayers can utilize the existing framework and benefit from the announced reliefs.
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